Consumer finance loans could cost more

A House panel Wednesday approved a bill (HB 425) that would allow consumer-finance companies to charge annual interest rates of 30 percent on loans up to $3,000.

That would be an increase from current law, which allows 30 percent rates to be charged on loans up to $2,000.

Sponsor Rep. Tom Goodson, R-Titusville, and other supporters on the House Insurance & Banking Subcommittee said the loans are risky for the companies and help people who cannot access loans through more traditional institutions such as banks.

The subcommittee voted 12-1 to approve the bill, which is next slated to go to the Regulatory Affairs Committee. The lone dissenter, Rep. Bill Hager, R-Delray Beach, said he didn't see a need for the change. He pointed, in part, to the nation's low overall interest rates, which he said give consumer-finance companies access to relatively cheap money to lend.

"I don't believe there are any grounds to be increasing these rates at this time,'' Hager said.

The bill also would allow maximum interest rates of 24 percent on loan amounts between $3,000 and $4,000. A maximum 18 percent rate would apply to amounts above $4,000.

Last modified: February 13, 2013
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